Solar tariffs could cost N.C. hundreds of jobs

Republican Sens. Richard Burr and Thom Tillis have vocally opposed the imposition of a tariff, citing the industry's growing importance to the state.

By Adam Wagner GateHouse Media

EASTERN NC -- A Trump Administration decision to impose tariffs on imported solar panels could slow the growth of the solar industry, including in North Carolina, according to industry officials.

Last month, President Donald Trump announced his decision to impose a four-year safeguard tariff on imported solar cells and modules, starting Feb. 7 at 30 percent and decreasing by 5 percent during each of the next three years before expiring. The tariff was the result of U.S. International Trade Commission case in which a pair of solar panel manufacturers argued cheap imported panels and modules for China and Asia are unfairly impacting the ability of American companies to compete in the market.

"Is it the death knell of the solar industry? Is it time to hold a wake for solar (photovoltaic) in the United States? No. It's going to be very manageable in the long run, but it does just bring everything down a bit, in some places worse than others," said Colin Smith, a solar markets analyst at GTM Research, a national energy analysis firm.

North Carolina will be the eighth-most impacted state by the tariff, which will result in 253 fewer megawatts -- roughly a 7 percent reduction -- coming online than under previous projections, according to GTM Research. Industry officials said companies were largely braced for the decision, but some projects in the works could be delayed or halted.

"Short term, the best way to slow things down is to create uncertainty, so I feel like this tariff does that, to a certain extent. Long term, the back-end economics are really good. In the long run, it will work out," said Jeff McKay, a spokesman for Cypress Creek Renewables.

The California-based firm has 69 installed solar projects in North Carolina.

An estimate, by the Solar Energy Industries Association, said North Carolina will lose an estimated 815 solar jobs in 2018. California leads with an estimated 3,439 lost solar jobs.

According to the Solar Foundation's most recent Solar Jobs Census, released in March 2017, the industry supported 7,112 jobs in North Carolina.

"There's a good argument to be made," Smith said, "that this (tariff) move actually hurt manufacturing of solar more than it helps."

'Still digesting'

Republican Sens. Richard Burr and Thom Tillis have vocally opposed the imposition of a tariff, citing the industry's growing importance to the state.

In an email, Allison Eckley, a spokeswoman for N.C. Sustainable Energy Association, wrote, "We are still digesting what this decision really means, but we are already receiving anecdotal feedback from our members that the decision is sidelining rooftop solar projects."

North Carolina had 2,939.9 megawatts of solar installed as of late 2017, according to the U.S. Energy Information Administration. Much of that existing solar -- and many plans for future expansion -- is in the eastern part of the state, where farmland has sprouted solar panels in recent years.

Cypress Creek Renewables has installations spanning the state, including Andrew Solar in New Bern and Scarlet Solar in Lenoir County.

"Overall, North Carolina has been a really good state to develop in, in that they have a lot of structure already in place, meaning when we apply for projects it tends to move quicker," McKay said. "There's a good amount of unused land, the utilities have been great to work with (and) they probably have an appetite for it."

Many developers anticipated the outcome of the trade case, with larger developers such as Cypress Creek stocking up on enough modules to complete all 2018 and some 2019 projects, effectively mitigating the highest tariffs.

Others, such as Wilmington-based Cape Fear Solar, were able to work with their suppliers to secure pricing so that the new laws wouldn't severely impact projects.

"Anybody in the industry has followed it pretty closely for a while, so we were very prepared for it and our supplier was very prepared for it," said Robert Parker, a Cape Fear Solar senior project manager.

Parker added that recent steps taken by Duke Energy, including a proposed $62 million rebate program designed to help customers install solar panels on their property, could help keep the industry viable in North Carolina while the tariffs are in effect.

'We don't have the infrastructure'

Still, serious doubts remain about whether the United States has -- or could build -- enough panel or module factories.

"We don't have the infrastructure in the United States right now for that kind of panel manufacturing, where the demand is at," Parker said.

Last week, JinkoSolar, a Shanghai-based firm, announced it intends to soon finalize the construction of a facility in the United States, even as it monitors the implementation of U.S. trade law.

While announcements such as that one appear to be the new tariffs working, Smith, the industry analyst, is more skeptical. If a company were to build both a cell production facility and a module production facility, he said, it would take 2 1/2 years if the process went completely smoothly.

"You might have a year, six months to sell into the U.S. market before the tariff steps down completely," Smith said.

Reporter Adam Wagner can be reached at 910-343-2389 or Adam.Wagner@GateHouseMedia.com.

Never miss a story

Choose the plan that's right for you.
Digital access or digital and print delivery.